The Central Bankruptcy Court accepted a Thai Airways International (THAI) debt rehabilitation petition on Wednesday amid concerns of a technical setback after one of the airline's board members poised to be made a rehab planner resigned.
The petition said THAI deserved to be revived because of its sound business foundations, years of experience, the profit-generating potential of its business units, and its brand value.
Tough negotiations with creditors will commence before that process can get under way, a court source said.
Forthcoming actions include a major debt restructuring, deep cost cuts, all-round reorganisation of the company, an income-generating capability shake-up and flight route improvement.
The court said the airline has been battered by stiff competition in the industry, with the Covid-19 pandemic serving as the "final nail in the coffin".
THAI's failure to keep abreast of the fast-evolving situation has been attributed to its state enterprise status, which was stripped when the majority shareholder, the Finance Ministry, sold 3% of its stake to the Vayupak 1 Fund last week. The court also said that without rehabilitation, creditors, debtors, staff and the national economy would suffer a blow.
The source said the court was informed the airline had registered capital of 26.9 billion baht, debts of 354.4 billion and assets worth 349.6 billion. THAI already missed a 10.2 billion baht debt payment due on May 21.
But as the petition was approved in court, Pailin Chuchottaworn, former CEO and president of PTT Plc, quit as a newly-appointed member of the THAI board, citing a violation of an anti-graft regulations.
He was one of four new additions to the airline's board. The others are Piyasvasti Amranand, a former THAI president; Pirapan Salirathavibhaga, a former justice minister; and Boontuck Wungcharoen, a former CEO of TMB Bank.
Those four and two other board members -- THAI acting president Chakkrit Parapuntakul and airline chairman ACM Chaiyapruk Didyasarin -- were nominated as rehabilitation planners in the petition submitted to the court.
A source at Government House said Mr Pailin met Prime Minister Gen Prayut Chan-o-cha on Wednesday, saying his board appointment violated the National Anti-Corruption Commission regulation, which bars anyone assuming a position in any organisation in which the government holds a stake within two years of leaving a cabinet minister post.
Mr Pailin served as deputy transport minister from December 2017 until last year.
A THAI source said Mr Chakkrit also faced a conflict of interest allegation as he sits on the executive board of the Siam Commercial Bank, one of THAI's creditors.
